Sidelining Cap and Trade’s Green Critics

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Fairness and Accuracy In Reporting (FAIR)

Sidelining Cap and Trade’s Green Critics

by
Neil deMause

The sweeping bill to
reduce greenhouse-gas emissions that moved through Congress over the
last year received relatively scant media attention, taking a distant
back seat to the healthcare reform bill and its attendant public
uproar. And, much like the healthcare debate (Extra!, 10/09),
coverage of climate-change legislation ended up obscuring the issues as
much as it explained them, viewing a Democratic compromise bill through
the lens of right-wing and corporate criticism, while marginalizing
progressive critics who said the legislation was insufficient to the
task at hand.

The tone of coverage was set in February, when President Barack Obama
issued preliminary plans for a system to set an overall cap on the
amount of carbon that can be emitted in the U.S. each year, and require
electricity providers, oil companies and the like to buy permits to
cover their emissions of greenhouse gases, either from the government
or from each other in an open trading market.

This "cap-and-trade" plan emerged out of a years-long debate over the
merits of a market-based trading scheme versus a more straightforward
tax on carbon emissions. Obama and Democrats in Congress settled on cap
and trade-a structure used by the Environmental Protection Agency to
help reduce acid rain in the 1990s-largely because it was considered to
be more politically palatable than a tax; its supporters have included
John McCain and major corporations such as Shell Oil and Dow Chemical.

Some economists and environmentalists, though, have insisted that cap
and trade is deeply flawed. Laurie Williams and Allan Zabel, two EPA
attorneys in California (where Zabel has helped to oversee that state's
cap-and-trade system), predicted in a Washington Post op-ed (10/31/09)
that a cap-and-trade system would lead to the "creation of powerful
lobbies seeking to protect newly created profits in permits," which
would help "lock in climate degradation for a decade or more." They
also warned that allowing producers to use "offsets" in place of
reducing their own emissions was an invitation to abuse:

If the landowner wasn't planning to cut his
forest, he just received a bonus for doing what he would have done
anyway. Even if he was planning to cut his forest and doesn't, demand
for wood isn't reduced. A different forest will be cut. Either way,
there is no net reduction in production of greenhouse gases. The result
of this carbon "offset" is not a decrease but an increase-coal burning
above the cap at the power plant.

Instead, some climate experts have endorsed what they're calling
"carbon fees," essentially a tax on emissions that would be rebated
back to households to help defray increased energy costs. NASA
climate-change expert James Hansen (Huffington Post,
7/9/09) notes that a carbon "fee-and-dividend" system that refunded
U.S. residents on a per-capita basis would ensure that "those with
below-average carbon footprints come out ahead....By the time the fee
reached the equivalent of $1/gallon of gasoline ($115/ton of CO2), the
rebate in the United States would be $2,000-3,000 per adult or
$6,000-9,000 for a family with two children."

This debate, however, was largely missing from media coverage, which stuck to presenting the dispute in simplistic blue-vs.-red terms. In the New York Times' news analysis (2/28/09)
of the Obama plan, environment reporter John M. Broder wrote that
"business lobbies and many Republicans raised loud objections" to
Obama's proposal, while "green groups and supportive members of
Congress applauded." When the House passed the Waxman-Markey bill, its
version of cap and trade, NBC's Nightly News
(6/27/09) counterposed the benefits of reducing climate change against
the economic costs of higher fuel prices: "President Obama says it's a
bold and necessary step to fight global warming and encourage a new era
of green energy. Critics, however, say the new cap and trade system to
limit greenhouse gases will lead to higher energy costs." Time.com
(4/18/09) likewise reported that "the main criticism of cap and trade
is that it may result in a rise in energy prices as carbon becomes more
expensive."

This, though, is only the "main" criticism of cap and trade as far as
the right is concerned; for most environmental scientists and
economists, increasing the cost of carbon-based energy in order to
reduce emissions is the whole point of either cap and trade or a carbon
tax. The main concern for many progressive critics is that Congress'
cap-and-trade plan would be, in the words of a joint statement released
by Greenpeace, Friends of the Earth, Public Citizen and other groups (5/22/09), "not only inadequate [but] counterproductive."

Greenpeace noted (5/15/09)
that the bill's goal of reducing carbon emissions to 4 percent below
1990 levels by 2020 wouldn't be nearly enough to avoid the 2ºC
temperature rise that most scientists say is the maximum the planet can
sustain without dire effects on climate. And, like Williams and Zabel,
it warned that the bill's use of "offsets" makes it too easy for
polluters to game the system.

Yet the coalition's action drew little media notice aside from brief mentions in the Times (5/22/09) and the Washington Post (5/22/09, 5/26/09). Some of the few mentions cited the groups' stance as misguided, such as a Paul Krugman column (New York Times, 5/18/09) and an editorial that appeared in the Pittsburgh Post-Gazette and Toledo Blade (5/19/09). Time's website (5/22/09) noted the environmentalists' opposition, but the print magazine (6/1/09)
pointed to Greenpeace USA director Phil Radford's saying that Obama was
"missing in action" on climate change as an example of
"environmentalists complain[ing] the White House has done too little
behind the scenes to defend" the House bill. In a notable exception,
the Madison Capital Times (5/27/09) published a lengthy editorial laying out the coalition's arguments.

And when Hansen and other carbon-tax advocates protested in November
outside the offices of the Natural Resources Defense Council-which has
taken the lead among more centrist environmental groups in backing
Waxman-Markey-the most prominent outlets to cover it were Indymedia (12/1/09) and the Huffington Post
(11/30/09). In contrast, when an American Petroleum Institute report
complained that cap and trade would hurt the oil refining business, the
news was featured in the Wall Street Journal (8/24/09), Houston Chronicle (8/25/09), Philadelphia Inquirer (8/27/09) and Reuters (8/24/09).

The carbon-fee alternative entered
the media discussion mostly through a handful of centrist or
right-leaning columnists and op-ed writers-such as Tom Friedman (New York Times, 4/8/09), Eleanor Clift (Newsweek.com, 12/11/09) and Greg Mankiw (New York Times,
8/9/09)-while news coverage typically dismissed alternatives to cap and
trade as lacking congressional support. When Rep. John Larson (D-Conn.)
introduced a bill to tax carbon emissions and use the proceeds to
reduce payroll taxes, which disproportionately fall on low- and
middle-income families, Broder (New York Times,
3/7/09) called it a "lonely quest" that was "probably going nowhere"
because "few are willing to openly advocate billions of dollars in new
taxes at a time of economic distress, even though a cap-and-trade
program also means higher energy prices."

The "economic distress" line was a common one in knocking down a carbon
tax. Yet reporters' obsession with energy costs apparently didn't
extend to their coverage of Waxman-Markey. When the legislation passed
the House in June, changes were made so that in place of auctioning off
the credits to carbon producers-as initially suggested by Obama and
backed by most environmental groups-the legislation would hand out 85
percent of the carbon credits for free, auctioning the rest. While
there's widespread debate over how much of this would result in
windfall profits for companies (WashingtonMonthly.com,
5/14/08), it undeniably reduces the amount of money generated that can
be rebated to families to compensate them for higher energy costs.
Waxman-Markey would provide rebates to the lowest-income households,
but nothing for the lower-middle class. As a result, Center for Budget
and Policy Priorities chief economist Chad Stone testified before
Congress (10/21/09), the Congressional Budget Office estimated that the
bottom fifth of U.S. households would come out ahead under
Waxman-Markey-but the middle three-fifths would see their expenses
rise.

The Boston Globe (4/1/09) noted
that auctioning versus allocation was "one of the most politically
charged aspects of regulating greenhouse gases," but failed to explain
why. A generally informative Washington Post FAQ on Waxman-Markey (7/6/09)
noted that giving away credits for free would "reduce costs for certain
companies," but answered its own question "Who loses in these
compromises?" with: "The federal government"-though it did note in an
aside that "Obama had proposed a combination of energy aid for
lower-income households and an extension of a temporary tax cut
approved this year."

The Washington Post (10/25/09),
in its coverage of the Senate companion bill to Waxman-Markey, reported
that the failure to auction permits "angered some environmentalists,"
though it couched it as because this would "favor wealthier Americans
who owned stock in companies affected by a national carbon cap." The
notion that auctioning credits could be used to help compensate
households for higher energy bills was nearly impossible to find in
media coverage.

Perhaps most striking, coverage
entirely avoided any talk about the problem that necessitated these
bills: the threat of increasing global climate change, and the immense
human and economic costs that would come with it. For example, a report
by the Economics of Climate Adaptation Working Group, a research group
sponsored largely by the reinsurance firm Swiss Re, estimated that the
costs of unchecked global warming-including everything from increased
severe weather disasters to the need to adapt farmland management to
shifts in climate-would amount to 19 percent of global GDP by 2030.
That's significantly worse than the earlier projections of British
economist Nicholas Stern that climate change would reduce GDP by 20
percent by 2100-and yet, like Stern's predictions (Extra!, 7-8/07), the new report received virtually no U.S. media notice.

By contrast, in October, CBO director Douglas Elmendorf testified
before Congress that Waxman-Markey would reduce GDP in 2020 by
one-quarter to three-quarters of a percentage point-an annual rate of
well under 0.1 percent. Elmendorf noted that his figures "do not
include any benefits from averting climate change."

The headline that the Washington Post
(10/15/09) gave to their story on Elmendorf's testimony: "Cap and Trade
Would Slow Economy, CBO Chief Says." As in most cases of media coverage
of climate legislation, readers would be advised to ask: Compared to
what?

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