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the San Francisco Chronicle

Fiscal Woes Could Delay Climate Change Efforts

Zachary Coile

Sen. Barbara Boxer, D-Calif., who chairs the Senate Environment and Public Works Committee, believes the upcoming elections, where Democrats are favored to win seats, could improve the odds in the Senate of passing a climate bill. (Lauren Victoria Burke / Associated Press)

The financial crisis and a deepening economic
downturn are threatening to delay efforts to deal with another pressing
global crisis: climate change.

Hopes for action had been running high since both Republican John
McCain and Democrat Barack Obama had pledged to make cutting U.S.
greenhouse gas emissions a top priority. But environmentalists now fear
that the next president may be more focused on reviving a flatlining
economy, and Congress could be wary of supporting any measures that
might slow growth or raise energy prices for consumers.

"The truth is there is a very large question mark hanging over the
idea that Congress would take economywide action on global warming with
the economy in such anemic shape," said Frank O'Donnell, president of
Clean Air Watch.

In the short term, a declining global economy could reduce the
growth in greenhouse gas emissions as consumption of goods and energy
usage drops. But world leaders warn it could also undermine efforts to
find long-term solutions.

European Union leaders are discussing delaying planned emissions
cuts in response to the financial crisis. United Nations officials
worry that wealthier nations may cut back on commitments to help poorer
countries invest in clean energy or adapt to the impacts of warming,
which is seen as crucial in getting a global deal to reduce emissions.

"You can't pick an empty pocket," Yvo de Boer, the United Nations' top climate official, told the Associated Press last week.

The scientific evidence of the need for action on climate change
continues to mount. Last month, scientists announced that man-made
carbon dioxide emissions rose by 2.5 percent last year, four times
faster than a decade ago and faster than the worst-case modeling had
predicted. The rise was fueled by rapid growth in emissions from
fast-developing nations such as China and India.

U.N. climate scientists have said that global emissions must peak by
2015 and drop by at least 50 percent by 2050 to limit the temperature
rise to 3.6 degrees Fahrenheit, the threshold where some of the most
extreme impacts could begin.

Warming a serious threat

But the growing consensus in the United States that global warming
is a serious threat has not been matched by a consensus in Washington
over how to solve the problem. All of the proposed solutions would
require broad changes in the economy and how Americans use energy, and
all carry significant costs.

Neither presidential candidate has backed away from his pledges to
tackle global warming. Both men appeared at former President Bill
Clinton's Global Initiative conference in New York last month to
reiterate their commitments to cutting emissions. At last week's
presidential debate, both candidates said investments in clean energy
could help revive the economy.

"It can be an engine that drives us into the future the same way the
computer was the engine for economic growth over the last couple of
decades," Obama said.

But translating those pledges into legislation that can pass Congress could prove politically difficult.

Obama and McCain have backed bills to create a cap-and-trade system,
which would cap emissions and allow major emitters like power plants to
trade credits to emit greenhouse gases. The plan mirrors the scheme
approved by the California Legislature and Gov. Arnold Schwarzenegger,
which requires cuts in emissions to 1990 levels by 2020.

Cap-and-trade plans

The goal of cap-and-trade plans is simple: Put a price tag on carbon
dioxide and other gases to pressure industry to reduce the use of
fossil fuels. By auctioning off credits, the government could raise
hundreds of billions of dollars in revenues to support investments in
renewable energy and other programs.

But a Senate cap-and-trade bill was pulled from the floor last year
before a final vote after most Republicans and some Democrats,
especially from Midwest and Southern states that rely heavily on coal,
raised concerns that it could slow economic growth or raise energy
costs. The U.S. Energy Information Administration estimated that the
bill would reduce gross domestic product by 0.2 to 0.6 percent by 2030,
and could raise electricity prices by 11 to 64 percent and gas prices
by 22 to 49 cents.

Scott Segal, who lobbies on the climate issue for electric
utilities, said those arguments could be even more powerful if the
economy continues its decline.

"The prospects for rapid action on climate change have been slowed
by the economy," Segal said. But he added that McCain or Obama could
still achieve a breakthrough on climate change if they push a package
that limits costs to the economy and guarantees that U.S. businesses
are not put at a disadvantage to competitors India and China.

In a sign of where the debate may be headed, two key House
Democrats, Energy and Commerce Committee Chairman John Dingell,
D-Mich., and Rick Boucher, D-Va., released a long-anticipated
"discussion draft" of a new cap-and-trade bill. The bill proposes less
aggressive short-term cuts in emissions than this year's Senate bill -
a 6 percent reduction from 2005 levels by 2020 - but deeper cuts in
later years to reach an 80 percent reduction by 2050.

Environmentalists are suspicious about parts of the bill, including
a provision to pre-empt efforts by California and other states from
moving ahead with their own cap-and-trade systems, and to prevent the
Environmental Protection Agency from using its existing authority under
the Clean Air Act to regulate greenhouse gases.

Bill called sign of progress

Sen. Barbara Boxer, D-Calif., who chairs the Senate Environment and
Public Works Committee, said she doesn't support everything in the new
bill, but called it a sign of progress. She also believes the coming
elections, where Democrats are favored to win seats, could improve the
odds in the Senate of passing a climate bill.

"We could have 58 or 59 Democrats, maybe 60 Democrats. We will have many more voices in the Congress on this," she said.

Boxer said she also thinks the next president will be able to make
the case that a weak economy demands a new energy and climate policy.

"We have to become a leader in alternative energy to get out of
this economic malaise," she said. "You're not going to get out of it
just by doing business as usual."

Climate options for the next president

Republican John McCain and Democrat Barack Obama have pledged to make
tackling climate change a priority, but a weakening economy could lead
Congress and the next president to put off immediate action. Here are
some options the next president could consider:

Cap and trade: McCain and Obama support
"cap-and-trade" proposals that would cap emissions at a certain date,
gradually reduce them over time and allow industry to trade credits to
emit greenhouse gases. But the plan's critics warn that it could raise
energy costs, and it's not clear that a majority in the House and
Senate will back the idea - even if Democrats gain seats this fall.

Let the states lead: The Bush administration
rejected efforts by California and at least 17 other states to set
tough limits on greenhouse gas emissions from vehicles. Both McCain and
Obama have said they would have granted California's request. Doing so
would allow the next president to signal a shift in climate policy.

Regulate under the Clean Air Act: The U.S. Supreme
Court said the EPA has the authority under the Clean Air Act to
regulate greenhouse gases. The next president could decide to begin
regulating emissions - effectively bypassing Congress and setting
limits through administrative action.

Energy bill: With a cap-and-trade bill possibly
tough to pass quickly, the next president and Congress might have
better odds of passing an energy bill with tax incentives and federal
research money for clean energy. McCain has stressed the need to build
new nuclear plants, while Obama has focused more on wind and solar


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