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Clear Act: A Climate Bill That Can Pass
How the cap-and-cash-back bill can clear a deadlocked Senate–and make most Americans better off.
Sep 14, 2010
For nearly a decade, green NGOs in Washington worked closely with corporate polluters to promote "cap and trade" as a climate solution. The deal was, there'd be a leaky carbon cap with lots of money flowing to polluters and Wall Street. It was far from perfect, but better--so the NGOs said--than nothing.
During the Bush years this strategy made sense--no other approach could survive a presidential veto. After 2008, when Democrats came to power, it made less sense, but the NGOs stuck with it.
In 2009, they squeezed a cap-and-trade bill through the House with 50.3 percent of members voting for it. For the past year they've been pushing a similar bill in the Senate, where 60 percent is needed to end debate. With John Kerry and Joe Lieberman doing the deals, they tweaked and re-tweaked the cap-and-trade bill to please coal-burning and nuclear utilities, oil and gas companies, agribusiness and manufacturers, and more. The result was a giant mishmash that confused everyone and didn't pick up votes. Finally, in late July 2010, Harry Reid, the Democratic leader, threw in the towel. This "sum of all lobbies" strategy simply wasn't working.
What now? With Republicans poised to gain seats in November, the future for climate legislation seems bleak. Any climate bill will have to overcome Republican objections that it is a "national energy tax," and indeed, will require active Republican support if it is to have a chance of passing.
Fortunately, there's a plan that can do this: the bipartisan CLEAR Act cosponsored by Senators Maria Cantwell (D-Wash.) and Susan Collins (R-Maine). The CLEAR Act puts a rising economy-wide price on carbon, mainly by auctioning permits to bring carbon into the economy. It then returns three-quarters of the auction proceeds directly and equally to all legal U.S. residents, enough to assure that a majority of families in every state gets back more than they pay in higher prices.
The CLEAR Act, a.k.a. cap and dividend, has the potential to attract Republicans because it's the opposite of a tax--it makes most Americans financially better off. Moreover, it's entirely market-based: it raises carbon prices but keeps government out of the dicey and costly role of picking winners. Best of all, its cap-and-cash-back mechanism can be easily understood by skeptical American voters.
None of this means the CLEAR Act can pass without some political horse-trading. But the deals needed for passage can be based on publicly supported principles rather than private gain.
The main area for deals involves the 25 percent of auction revenue that isn't returned directly to the people. What if, for example, that money were allocated to two grand public purposes: grants to states for job creation, and federal debt reduction? The proportions could change over time, with more job creation early on and more debt reduction later. When coupled with direct cash back, such a simple, transparent carbon pricing system could attract fence-sitters on both sides of the aisle.
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Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
This article was written for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas and practical actions. Licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Peter Barnes
Peter Barnes--an entrepreneur who co-founded Working Assets and a solar energy company--is co-founder of On the Commons. He is the author of "Capitalism 3.0: A Guide to Reclaiming the Commons" (2006) and "Climate Solutions: A Citizens Guide" (2008). His 2001 book "Who Owns the Sky?: Our Common Assets and the Future of Capitalism" presented the cap-and-dividend solution for climate change.
For nearly a decade, green NGOs in Washington worked closely with corporate polluters to promote "cap and trade" as a climate solution. The deal was, there'd be a leaky carbon cap with lots of money flowing to polluters and Wall Street. It was far from perfect, but better--so the NGOs said--than nothing.
During the Bush years this strategy made sense--no other approach could survive a presidential veto. After 2008, when Democrats came to power, it made less sense, but the NGOs stuck with it.
In 2009, they squeezed a cap-and-trade bill through the House with 50.3 percent of members voting for it. For the past year they've been pushing a similar bill in the Senate, where 60 percent is needed to end debate. With John Kerry and Joe Lieberman doing the deals, they tweaked and re-tweaked the cap-and-trade bill to please coal-burning and nuclear utilities, oil and gas companies, agribusiness and manufacturers, and more. The result was a giant mishmash that confused everyone and didn't pick up votes. Finally, in late July 2010, Harry Reid, the Democratic leader, threw in the towel. This "sum of all lobbies" strategy simply wasn't working.
What now? With Republicans poised to gain seats in November, the future for climate legislation seems bleak. Any climate bill will have to overcome Republican objections that it is a "national energy tax," and indeed, will require active Republican support if it is to have a chance of passing.
Fortunately, there's a plan that can do this: the bipartisan CLEAR Act cosponsored by Senators Maria Cantwell (D-Wash.) and Susan Collins (R-Maine). The CLEAR Act puts a rising economy-wide price on carbon, mainly by auctioning permits to bring carbon into the economy. It then returns three-quarters of the auction proceeds directly and equally to all legal U.S. residents, enough to assure that a majority of families in every state gets back more than they pay in higher prices.
The CLEAR Act, a.k.a. cap and dividend, has the potential to attract Republicans because it's the opposite of a tax--it makes most Americans financially better off. Moreover, it's entirely market-based: it raises carbon prices but keeps government out of the dicey and costly role of picking winners. Best of all, its cap-and-cash-back mechanism can be easily understood by skeptical American voters.
None of this means the CLEAR Act can pass without some political horse-trading. But the deals needed for passage can be based on publicly supported principles rather than private gain.
The main area for deals involves the 25 percent of auction revenue that isn't returned directly to the people. What if, for example, that money were allocated to two grand public purposes: grants to states for job creation, and federal debt reduction? The proportions could change over time, with more job creation early on and more debt reduction later. When coupled with direct cash back, such a simple, transparent carbon pricing system could attract fence-sitters on both sides of the aisle.
Peter Barnes
Peter Barnes--an entrepreneur who co-founded Working Assets and a solar energy company--is co-founder of On the Commons. He is the author of "Capitalism 3.0: A Guide to Reclaiming the Commons" (2006) and "Climate Solutions: A Citizens Guide" (2008). His 2001 book "Who Owns the Sky?: Our Common Assets and the Future of Capitalism" presented the cap-and-dividend solution for climate change.
For nearly a decade, green NGOs in Washington worked closely with corporate polluters to promote "cap and trade" as a climate solution. The deal was, there'd be a leaky carbon cap with lots of money flowing to polluters and Wall Street. It was far from perfect, but better--so the NGOs said--than nothing.
During the Bush years this strategy made sense--no other approach could survive a presidential veto. After 2008, when Democrats came to power, it made less sense, but the NGOs stuck with it.
In 2009, they squeezed a cap-and-trade bill through the House with 50.3 percent of members voting for it. For the past year they've been pushing a similar bill in the Senate, where 60 percent is needed to end debate. With John Kerry and Joe Lieberman doing the deals, they tweaked and re-tweaked the cap-and-trade bill to please coal-burning and nuclear utilities, oil and gas companies, agribusiness and manufacturers, and more. The result was a giant mishmash that confused everyone and didn't pick up votes. Finally, in late July 2010, Harry Reid, the Democratic leader, threw in the towel. This "sum of all lobbies" strategy simply wasn't working.
What now? With Republicans poised to gain seats in November, the future for climate legislation seems bleak. Any climate bill will have to overcome Republican objections that it is a "national energy tax," and indeed, will require active Republican support if it is to have a chance of passing.
Fortunately, there's a plan that can do this: the bipartisan CLEAR Act cosponsored by Senators Maria Cantwell (D-Wash.) and Susan Collins (R-Maine). The CLEAR Act puts a rising economy-wide price on carbon, mainly by auctioning permits to bring carbon into the economy. It then returns three-quarters of the auction proceeds directly and equally to all legal U.S. residents, enough to assure that a majority of families in every state gets back more than they pay in higher prices.
The CLEAR Act, a.k.a. cap and dividend, has the potential to attract Republicans because it's the opposite of a tax--it makes most Americans financially better off. Moreover, it's entirely market-based: it raises carbon prices but keeps government out of the dicey and costly role of picking winners. Best of all, its cap-and-cash-back mechanism can be easily understood by skeptical American voters.
None of this means the CLEAR Act can pass without some political horse-trading. But the deals needed for passage can be based on publicly supported principles rather than private gain.
The main area for deals involves the 25 percent of auction revenue that isn't returned directly to the people. What if, for example, that money were allocated to two grand public purposes: grants to states for job creation, and federal debt reduction? The proportions could change over time, with more job creation early on and more debt reduction later. When coupled with direct cash back, such a simple, transparent carbon pricing system could attract fence-sitters on both sides of the aisle.
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