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PRI's Environmental News Magazine

“Ending the Energy Stalemate”

Air Date: Week of December 10, 2004

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President Bush gave Kyoto the cold shoulder but some advocates of climate change policy see signs that the U.S. could take some steps toward action. Jeff Young reports from Washington.

Transcript

CURWOOD: While the United States is conspicuously absent from the newly ratified Kyoto protocol, there have been some interesting developments here in the U.S. in recent days. Several influential groups and politicians are pushing for a national energy policy tied to some sort of action on climate change. Former president Bill Clinton focused on this very topic at a recent symposium.

CLINTON: Okay, so Kyoto wasn’t perfect. I’ve heard all that bellyaching and whining. (LAUGHTER) It was all true. It’s also true that we have five percent of the world’s people and we emit 25 percent of the greenhouse gases. It’s time to stop worrying about when, if ever, the current administration will change its mind about climate change -- we should continue to lobby for it. But the point I want to make is the most important thing you can do is something, anything.

CURWOOD: But given the political climate in the nation’s capital, what is likely to be done? Living on Earth’s Washington correspondent Jeff Young joins us now to talk about that. Jeff, hello.

YOUNG: Hi Steve.

CURWOOD: Now Jeff, President Bush begins his second term shortly and he doesn’t want any mandatory limits on greenhouse gases. And I don’t think there are votes in the Congress for that, either. In short, it doesn’t look very good for those who want some federal action on climate change. So what do they do now?

YOUNG: Well, that’s one of the questions addressed in a major new report from the National Commission on Energy Policy. This is a bipartisan group funded by the Hewlett foundation. Its report is called “Ending the Energy Stalemate”; it covers all things energy – oil security, alternative fuels, nuclear power and, probably most significantly, climate change.

This commission had some heavy hitters from industry, science, conservation and labor groups all working for close to three years to get some sort of consensus on a comprehensive energy policy that would put a cap on carbon emissions, but still be acceptable to all those very diverse parties. The head of the Environmental Protection Agency under the last President Bush, William Reilly, was one of the commission’s co-chairs.

REILLY: We wish to raise the priority for climate without risking the economy. I believe that our diverse commissioners have charted a prudent course through a passionate time.

CURWOOD: So what is that prudent course?

YOUNG: This is a very modest proposal for a cap and trade system for CO2 – that of course limits the total carbon emissions but allows companies to buy and sell permits for each ton of carbon dioxide they emit. The emissions reductions targets here are far below those under Kyoto or even the targets in the Climate Stewardship Bill that Senators McCain and Lieberman proposed. This is very much geared to cutting the costs of cutting carbon so as to get industry on board to make that first step toward a mandatory cap, even if it’s a little baby step.

CURWOOD: Now Jeff tell me, how would this happen?

YOUNG: Industry’s main concern has been that capping carbon could cause energy costs to shoot up to who knows what. This proposal seeks to avoid that with a sort of safety valve. If the price of carbon permits hits a certain number – in this case it’s $7 a ton – then companies can buy more permits at that price. And that’s as high as it goes. So this sets an absolute cap on the price as well as on the carbon.

CURWOOD: And what kind of reception is this getting?

YOUNG: Well, you know they say you’ve got balance when you have people on both sides of an issue angry with you –

CURWOOD: Mm-hmm…

YOUNG: Well that’s kind of what we see here with neither industry nor the environmentalists happy with this. Environmental groups say it doesn’t do nearly enough to reduce carbon. Eileen Claussen directs the Pew Center on Climate Change. She likes some of the proposals in this report but she says that a cap on carbon is so weak it would actually have us increasing our emissions over the next 15 years.

CLAUSSEN: Their climate policy is essentially an emissions growth policy all the way out 'til 2020. And I think you probably know that the president’s policy has us growing our emissions until 2012. Well this commission suggests that we should grow our emissions until 2020, which I think is really terrible from an environmental point of view and actually not good from an economic point of view either.

YOUNG: Claussen and many environmental leaders also do not like that safety valve on the price of carbon emissions.

CURWOOD: Now why is that? Is it that they don’t like the concept altogether, or they just don’t like the particular price tag that this report sets?

YOUNG: A bit of both. Some say the safety valve would reduce the market incentives to cut emissions and distort the market. Others say that past successful cap and trade programs, like the one that reduced acid rain pollution in the ‘90s, had a safety valve on prices, it just never kicked in. So they say it’s really about picking the right price. But the number the commission proposes here strikes many people as too low, and that gives industry an easy out.

CURWOOD: So the devil’s in the details on that. What does industry say to all this?

YOUNG: Well, the major energy and utility lobbying groups are still very firmly against any mandatory carbon cap. However, there are some interesting exceptions we’re starting to hear. We’re hearing a few utility companies saying that they think some sort of cap on carbon is coming. It’s inevitable, and it’s okay. Cinergy, an Ohio utility that burns a lot of coal, was the latest to say that. Their shareholders wanted to know how a carbon cap might affect profits and the answer from the company basically, was, not very much, so long as the cap was moderate and had some limit on the total cost. In other words, something very much like what the energy commission is recommending here.

CURWOOD: So, Jeff, where do you see all this going?

YOUNG: The commissioners did not spend three years of their lives just to have this report sit on a shelf somewhere. They plan to lobby hard for these proposals in here, and there will be several items on energy and climate in the coming congress. There’s still, of course, that energy bill to consider, the president’s Clear Skies legislation is likely to come up--and there are some people who would like to amend that to include a cap on carbon—and Senators McCain and Lieberman promise to reintroduce their climate stewardship bill.

CURWOOD: So the United States is not part of the Kyoto treaty, but this is still a hot issue here, huh?

YOUNG: I think so.

CURWOOD: Jeff Young is Living on Earth’s Washington correspondent. Thanks, Jeff.

YOUNG: You’re welcome.

CURWOOD: Coming up: How global warming is changing Alaska’s landscape and the lives of the people who live on it. Keep listening to Living on Earth.

[MUSIC: Al Petteway “Wild Mountain Theme” MIDSUMMER MOON (Maggie’s Music, Inc. – 1996)]

 

Links

National Commission on Energy Policy Report [PDF]

 

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