Yesterday, Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) introduced a well titled bill, the Carbon Limits and Energy for America's Renewal (CLEAR) Act. It's meant to provide a clear and simple alternative approach to the complex Clean Energy Jobs and American Power Act (aka Kerry-Boxer) that has a lot of -- but possibly not enough -- votes in the Senate.
The bill is short (39 pages, compared to Kerry-Boxer's 900 or so). People on both the left and right are excited about it because it creates a cap and dividend, rather than a market-based cap and trade system. The dividend would be paid to each American family, and is estimated to be $1,100/year.
But is CLEAR effective; that is, will it reduce carbon emissions, and does it have a chance of passing? Answers below the fold.
From a McClatchyDC story:
Under her bill, the federal government would auction off carbon shares to the nation's 2,000 or so fuel producers like coal and oil companies. Every two years, the shares would expire and, over the years, the U.S. government would offer fewer and fewer shares for sale as a way to reduce carbon consumption.
Seventy-five percent of the money raised would be rebated directly to U.S. citizens. Cantwell's office estimated that an average family of four would receive a total of about $1,100 a year in the form of tax-free monthly checks.
CLEAR appeals to the left, which doesn't want Goldman Sachs engineering a carbon bubble. And it appeals to the right: Exxon Mobil and Lisa Murkowski (R-AK) welcome the bill's fresh approach.
Murkowski, the senior Senator from Alaska (who I am tracking through the DailyKos whip project -- click my sig line for details on the project), should be particularly enamored of Cantwell's bill, because it's so similar to the Alaskan Permanent Fund. This fund collects royalties from Alaska's North Slopes oil, invests them, and returns some to each Alaskan -- $1,305 was paid in October 2009. The Permanent Fund Dividend is supposed to offset Alaskans' high energy bills, but instead is a boon to the broader economy, with Alaskans traveling from the Bush to spend their dividend funds at Anchorage's Wal-Marts.
If Cantwell's calculations are correct and CLEAR gives each family a $1,100 dividend, which is 75% of the carbon auction revenues, then it's because each family's carbon costs have gone up $1,467. By comparison, Kerry-Boxer is predicted to cost in the range of $175/year. (Any bill that reduces carbon effectively has enormous benefits to consumers not counted in these cost projections.)
Encouraging short sighted stupidity consumer stimulus is not the biggest objection to CLEAR.
- Does CLEAR cap carbon emissions as effectively as its supporters claim? The jury is still out, but it doesn't appear to work when needed.
Policy specialists at the Sightline Institute, via Grist, call CLEAR a diamond in the rough:
CLEAR sets out a target of a 20 percent reduction below 2005 levels by 2020. Yet the act’s cap-and-trade program achieves only about a 5 percent reduction below 2012 levels by 2020. Because the act’s overall targets and its cap-and-trade program use different baseline years, and because no one knows what emissions will be in 2012, it is impossible to determine the extent to which CLEAR’s cap-and-trade mechanism falls short of the act’s overall goals. But it is clear that there will be some shortfall.
So CLEAR only reduces carbon emissions 5% by 2020, when a new study from the Met Office in Britain shows that emissions have to peak before 2020 if we have any hope of holding the temperature rise to two degrees Celsius. Hmmm. And CLEAR hopes to achieve the full 20% reduction target by its CERT fund (also known as the "other 25% fund" -- more on that later) but makes no promises. Hmmm. In its defense, CLEAR has a tighter cap on carbon by 2050, but the scientists keep telling us that we have to reduce carbon early, not late.
- Does CLEAR invest in America in the same way that CEJAPA does? Unequivocally, no.
CLEAR uses the remaining 25% not rebated to American families to create a Clean Energy Reinvestment Trust (CERT) Fund, that would award (via competitive bidding) funds only to certain worthwhile causes, e.g., worker retraining, clean energy research, weatherization, ocean acidification research, and the like. I call this the "catfight" section of CLEAR, because all of these worthy causes would be pitted against each other via competitive bidding.
Jesse Jenkins of the Breakthrough Institute notes that the CERT fund is evidence of a lack of a clean energy economy strategy. By comparison, Asian economies are willing to spend half a trillion dollars to beat America in the race to invent a clean energy economy.
CLEAR is simple, but it says nothing about jobs. CEJAPA is long and complicated, in large part, because it promises nearly two million clean energy jobs to Americans. And an investment in jobs is an investment in America. Once again, the Alaskan Permanent Fund provides historical precedent. When originally created, some Alaskans wanted to use it as a development bank for in-state projects. Instead, funds are returned to citizens to spend as they see fit, making the fund extremely politically popular -- but no one outside of extractive industries (oil and mining) invests in Alaska, and the state does not have infrastructure that would welcome private investment.
- Is CLEAR Politically Effective? Probably not, although it's early.
Early this year, Congressional leaders made a decision to combine renewable energy and carbon emission limits into one bill. Generally, renewable energy is popular but limits on carbon raise "job killer" fears. However, as Kerry-Boxer has stalled, some people see political upside to decoupling the two. CLEAR is one such effort to decouple the two.
CLEAR probably has about half a dozen Senate supporters who've expressed hostility toward cap and trade but want to do something about carbon (Cantwell, Collins, Dorgan, probably Bingaman and Murkowski, and possibly one or more others). It does not yet have anywhere close to sixty votes in support. By comparison, Kerry-Boxer has 31 definite yes votes, 10 probably yes votes, and 27 fence-sitters. As of now -- and it's still very early for CLEAR -- it does not appear to have a chance of passing Congress this year. I've long speculated that CLEAR provides political cover for conservadems who dislike CEJAPA but want renewable energy goodies for their states: they vote for CLEAR, watch it fail, pass ACELA or other renewable energy bill, and tell their constituents that they tried to do something about carbon. A renewable energy bill that fails to mention the slow-moving global catastrophe of carbon emissions that we have unleashed constitutes planetary malpractice -- and, given the slower-moving Senate's conservative ways, a cap on carbon has a better chance of passing if coupled with a renewable energy bill.
I'm very encouraged by Senator Kerry's comment, posted earlier today, when asked whether he was familiar with CLEAR:
Yes (39+ / 0-)
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I have and I am. I've had long talks with Maria and Susan both about it. I welcome all constructive engagement in a mechanism for putting a limit on carbon pollution and that means putting a price on carbon. The simplicity of their approach obviously has a lot of bumper sticker appeal - you can understand it. That said - the relative levels of direct aid to consumers, investments in clean energy, protections for businesses, etc ... there are a lot of moving parts to it. Some questions that jump out affect both the path to 60 votes and the path to a ratifiable treaty -- ie, if you can't use the auction revenue for international adaptation for poor countries, not only will you not get a treaty but you won't tackle climatre change globally. I'm discussing these kinds of things with my colleagues every day, and there are many perspectives on the right levels on those things. These are the kinds of things that we can work on together during the legislative process, and I'm glad that Senators Cantwell and Collins feel strongly that we need a strong limit on carbon pollution because that's job #1.
by John Kerry on Sat Dec 12, 2009 at 08:48:01 AM PST
I'd like to visit Alaska, but I wouldn't want to be an Alaskan, not even with a permanent dividend to sweeten the offer. I want the Senate to pass the most effective bill possible (and, since that probably won't be anywhere near what the scientists tell us is needed, amend the bill as needed until we get it right). Although the simplicity of CLEAR is to be commended, I can't support the bill.