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Sidelining Cap and Trade’s Green Critics
As with healthcare, right-wing complaints framed the debate
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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16 Comments so far
Show AllWe are all going to burn up at this rate. I feel sorry for the polar bears, but, dammit, water is going to lapping up at the back-door of many people while wild winds blow off their roofs.
Can't we get SERIOUS here about carbon reduction? Cap and trade of course is supported by energy companies. It's another way to screw money out of the American public.
Gary
"And what is a man without energy? Nothing - nothing at all."
-- Mark Twain
It's also a racket the banks are pushing. An article in the February issue of Harper's called Conning the Climate by Mark Shapiro laid out how the scheme worked. Unfortunately, you have to be a Harper's subscriber to read it on line, but it's the financial institutions turning the process into one of their financial "products" to trade and make money off, which will, of course, ultimately do nothing about reducing greenhouse gasses.
Yes, and cap and trade financial industry manipulation has the potential to trigger the next big economic meltdown (note: its is not the only potential trigger).
Anybody who supports cap and trade needs to understand that it hasn't worked in Europe and it won't work in the US.
The best way to fix this problem is to get alternative clean energy sources going as fast as possible. This is no time to put expensive regulations on our present energy system as we plainly cannot afford to now. That needs to happen after our country recovers, if ever, from the Bush depression. We have plenty of wind and sun in our country to produce energy so we need to use those sources and give many people jobs building a new system.
>>>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.
The sheer arrogance of countries like the US & Canada and the willful ignorance of the rightwingers (and many in the left, too) are mind-boggling. Reducing emissions by 5-6% below 1990 levels by 2012 is what was agreed upon in 1997 - when countries around the world signed the Kyoto Protocol. This *modest* target was set only as a *first step*, so that countries could get on with the task of addressing climate change without haggling on the exact extent of reduction that would be needed globally to avoid danger. Meanwhile, greater scientific understanding was expected to throw more light on how much reduction would be needed and how fast. What followed only pointed to *greater* urgency and *more drastic* reductions in emissions. Based on a totally logical and obviously fair principle of "common but differentiated responsibilities", richer countries were to start cutting back on their emissions *first* before asking the developing countries to do their part. Many countries in Europe went ahead and did exactly that. Germany alone is pulling more than its weight - as it met the bulk of the EU target by reducing its own emissions by over 20% below 1990 levels. Whiners can say that it was easier for Germany after the reunification since industries in East Germany were inefficient, so improving their efficiency helped Germany meet its targets. What these whiners forget is that the USA and Canada lost so much of manufacturing jobs during the 1990's and in the next several years, and yet their total emissions went up. And people like Stephen Harper conveniently hide behind the USA - saying that Canada has to "co-ordinate" its plans with those of the USA, otherwise Canada would be put in a disadvantageous position. It's like saying he won't take a shower unless the other guy does too. Even countries that did not commit to reducing emissions, such as India and China, are going ahead with increasing their domestic share of renewable energy.
It's amazing how people who don't really care about action on climate change are so easily manipulated by the media, which parrot the talking points supplied by the denial industry, and then everyone pounces on some news item and attacks the whole thing as a conspiracy for taxation and control. Debating or challenging cap and trade is fine - as long as there is also a push for urgent, alternative action.
Let's trade corn ethanol for switch grass ethanol to cap global warming.
There seems to be a conspiracy to NOT talk about the commitments made under the Kyoto Protocol in 1997 (though never ratified by the US Congress). MOST EU countries are on their way to meeting or exceeding their targets by 2012 (the original date to meet commitments made under Kyoto). It is completely disingenuous by countries like the US and Canada to pretend that commitments made under Kyoto don't count and to arbitrarily fix the emissions levels in the last few years as basis for reduction (and not 1990 levels) and to move the target date to 2020 (and not 2012), and yet talk about China, India and so on.
Those who say cap and trade scheme has not worked in Europe should keep in mind that the EU is on course to meeting its earlier commitments to reduce emissions anyway. So, cap and trade, even if it didn't work the way it was intended, was only *additional*. The US Congress is the biggest obstacle to taking *any* action - simply because the senators are working for different masters. That's why Kyoto was not ratified. Whether "trading" is allowed or not, "capping" is a must - let's not forget that.
Alcyon
Here I have no doubt at all, I've read that bill and there is is no debate about Cap and Trade. It IS nothing but a money maker for the financial/energy community and a tax bonanza for the government. I don't know how the European bill was written, but this one is just plain bad.
The supposed benefit (admitted by its authors and its supporters) is so miniscule as to be invisible. But the economic damage is quite plain. And to those least able to afford it. Thus I feel safe in assuring you, C&T will not pass here.
You are suggesting that Cap and Trade has been successful in Europe in effect. I don't see that and it doesn't look like any of the other countries are going to come close to Germany or their goals with the numbers I'm seeing.
As to movement on climate agreements, it looks to me as if there is a real problem there. It looks as if Mexico is going to emulate Copenhagen I think. Nada. Do you agree?
Caligula, no I didn't suggest cap and trade was successful in Europe - not even in effect. I just said that Europe - basically the EU - had started to work on its commitments under the Kyoto Protocol (signed in 1997, ratified later) MUCH earlier. They did not depend on cap and trade to bring about emission reduction, and as I said, collectively they are on their way to meeting their targets under Kyoto. At the time of signing of the Kyoto treaty and in the years that followed, several schemes were put forth to speed up the whole process, and cap and trade was one of them. Carbon offset is a related concept - but mostly used in a voluntary context, and hence is not considered so controversial. The so-called Clean Development Mechanism (CDM) is another, whereby developed countries would help other countries to upgrade their technology - with money or technology or both - and thus help them develop, with a smaller carbon footprint than that would result without such help. In return, the companies would get some credit. And so on. The European mindset was to try any proposal that sounded reasonable, but the important thing was *to get on with it!* That's what they did, and only 3 out of the 15 original-EU countries will fail to meet their targets, but EU as a whole will meet their Kyoto obligations (deadline: 2012). Of course, some mistakes were made - such as the EU decision to promote biofuels. Anyone with some brains should have seen the problems with biofuels on a large scale. And cap and trade was another scheme that is now clearly seen to have problems, even though the logic of it seemed sound at the beginning.
So, yes, the US can learn from the European experience with cap and trade, and drop the whole thing too. But is that all there is to learn from Europe? What prevented the US Congress from ratifying Kyoto? Canada is hiding behind the US, too. So even though Canada signed and the Parliament ratified the Kyoto accord, meeting the commitments is out of the question. Those who cited the economy should be asked - where is the economy now, and where is it going? What do they have to say about the technological gap that is emerging in green technologies, precisely as a result of this dithering? Developing technology is like evolution - it takes a finite amount of time. Those who blabber on about green technology and green jobs seem to think it's like Creation - where things can happen magically, overnight.
Yes, some people are already giving up on the meeting at Mexico. You see, when people meet at a COP gathering, the understanding is that most of the work has already been done BEFORE arriving there. With the denial industry so successful at sabotaging such work and the IPCC needlessly put on the defensive, people don't expect much from Mexico. But again, giving up on the whole process is unthinkable.
Alcyon
"What prevented the US Congress from ratifying Kyoto? Canada is hiding behind the US, too."
Ooh, thats too easy! Money.
"some mistakes were made - such as the EU decision to promote biofuels. Anyone with some brains should have seen the problems with biofuels on a large scale"
I wish someone would explain that to our idiot Congressmen.
"Those who blabber on about green technology and green jobs seem to think it's like Creation - where things can happen magically, overnight."
Well, thank God, someone that realizes the horse really does have to be at the front of the cart! As for the "technology gap" I really haven't seen any new technology that amounts to anything.
"With the denial industry so successful at sabotaging such work and the IPCC needlessly put on the defensive, people don't expect much from Mexico."
Here we disagree, The IPCC put themselves on the defensive. The whole global warming/climate change believers have been delt a blow by its mistakes. No matter that insiders see these things as insignificant or dismiss them as small mistakes that people just don't understand, when you claim science and it even looks like it was manipulated..."Houston, we have a problem"
"But again, giving up on the whole process is unthinkable"
Giving up isn't in the cards, but its most assuredly been set back. No hope of passing climate change legislation while Obama is in office I fear.
>>>Caligula wrote: As for the "technology gap" I really haven't seen any new technology that amounts to anything.
Really? Let's say that countries like China, India, South Africa, etc., decide to buy lots of wind power and solar PV systems, along with the electrical control systems, metering systems, etc. And they invite manufacturers from all over the world to submit bids - with details on technology and price. Who do you think are likely to win such orders? European companies or American/Canadian? BTW, India already has 1000's of MW wind power capacity, most of it imported from Europe. China is increasing it's capacity in renewable energy.
Any country that wants to import renewable energy systems, public transportation systems (underground metro), control systems for energy efficiency, etc., through global competitive bidding, is probably NOT going to buy them from the USA.
So, the technology may not "amount to anything" for you, but the rest of the world is not going to simply sit around and argue and just point fingers.
Alcyon
"So, the technology may not "amount to anything" for you, but the rest of the world is not going to simply sit around and argue and just point fingers."
I believe my state has more wind power than India. But your point is well taken about manufacturing and where the technology would be developed. Which brings us to tax and trade policies.
I would point out that solar tecnology was developed here and GE did the WP turbine technology iof I'm not mistaken (on this I could be)
As long as it pays corporations to manufacture things in other countries and sell them here or its cheaper to buy that technology because we allow them to sell here for less than we sell to them, nothing changes.
This to me is just one of the flawed strategies that inhibit the Global Warming strategies. Trying to scare people or trying to lecture them on how bad and how stupid they are or fudging numbers, publishing unsubstiantiated claims, gets you to exactly where the situation is today.
What would happen if you opresent the argument as "we need to stop the unfair trade practices we are allowing other nations, we need to bring jobs back to America" then over to the side you say "you know, China is about to buiold a plant here to manufacture wind turbines, we should be building our own turbines"
I believe more progress would be made that way, than the current show. What do you think?
Cap and trade does nothing for reducing green house emmissions, and allows the polluters to continue and expand their polluting emmissions while Wall Street creates a new carbon market and makes billions off it. Guess who gets screwed on the backside of this new scam? We The People just like every other scam.
As I see it, the problem is the usual "money talks"... and drowns out the public interest. As long as we play by Big Money's rules, the public interest will take a back seat.
We could lobby our reps to put public interest issues like this one up for the public to decide directly through safe public referendums. (Horror of horrors, Chavez does that and even Zelaya tried to do that!)
But from the looks of it, the oligarchy has managed to convince the public that referendums don't work, using California's corrupt super-majority and unlimited Big Money ad referendums as an example.
So this article and most others are simply exhorting the public to play by Big Money's rules, through their system of bought politicians, instead of letting the people decide directly. http://ni4d.us/
Since carrots don't work with the elite, let's go back to sticks .... BIG sticks!