With the Waxman-Markey energy bill rushing toward a vote in Congress, questions around the intent and the effectiveness of the bill are raging.
Cap-and-trade was supposed to allow Congress to avoid picking winners and losers in the fight against climate change. Advocates claim that approach, which relies on the market to figure out the easiest way to reduce greenhouse emissions, is at the heart of the Waxman-Markey energy bill that the House is preparing to vote on tomorrow. But, among many, many other things, the 1,200-page bill would also devote $60 billion to making sure clean coal isn't a loser.
So will Waxman-Markey help protect the environment and move America toward a more sustainable model of energy production? Maybe. However, it seems certain that the bill as currently written will do nothing to dislodge coal as our primary source of power for decades to come. Less certain is whether the limits set in the cap and trade system are sufficient to place any meaningful limit on fossil fuels.
Greenpeace is against it.
Since the Waxman-Markey bill left the Energy and Commerce committee, yet another fleet of industry lobbysists has weakened the bill even more, and further widened the gap between what Waxman-Markey does and what science demands. As a result, Greenpeace opposes this bill in its current form. We are calling upon Congress to vote against this bill unless substantial measures are taken to strengthen it. Despite President Obama’s assurance that he would enact strong, science-based legislation, we are now watching him put his full support behind a bill that chooses politics over science, elevates industry interests over national interest, and shows the significant limitations of what this Congress believes is possible.
The Sierra Club is for it.
The Waxman-Markey draft bill is a strong start and is testament to their decades of leadership on clean energy and other environmental issues. We look forward to working with them and other members of the Energy & Commerce Committee in order to flesh out the remaining details and move the strongest possible bill to the House floor.
Al Gore is for it. In fact, he's skipping other events this week to spend his time on the phone, encouraging reluctant Congressmen to vote for the bill.
Finally, the American Coalition for Clean Coal Electricity is against it on the grounds that it doesn't provide enough time to guarantee electricity producers don't decide to switch to something other than coal.
Forcing electricity providers to commit to a reduction of 17 percent below 2005 levels by as early as 2020 will force electricity providers to make almost immediate investment decisions on how to meet that compliance deadline. Such a short timeline for decision making could leave electricity generators no choice except to switch to higher-priced fuels to meet the accelerated deadline, instead of focusing on bringing carbon capture and storage technologies to the marketplace.
So what kind of bill can put Greenpeace and the clean coal folks on the same side of the aisle? One that's far weaker than we would hope for. It may not give the clean coal team everything they would wish for, but it certainly gives them a stocking full of goodies.
Since cost-effective, large-scale clean-coal technology is still untested, the first thing the bill would do is allow a quasi-public corporation to tax electricity distributors $10 billion over 10 years to fund "demonstration projects." We can see the appeal of supporting basic research on how to make the black stuff greener, especially if it includes research on retrofitting plants.
There is also a ten year period in which coal gets huge subsidies to prove out carbon capture, subsidies that far outweigh the cost of any allowances required under cap-and-trade. Even at the end of that period, the regulatory picture is unclear, and coal may continue to get subsidies that negate the cost of carbon allowances.
Under Waxman-Markey, all sources of energy are equal -- but coal is a lot more equal than others.
When it comes to encouraging the growth of renewable energy, the Wall Street Journal would have you believe that Waxman-Markey is worse than nothing.
President Obama says the greenhouse-gas emissions cutting Waxman-Markey bill before Congress will "spark a clean energy transformation." But a new analysis by the Environmental Protection Agency casts doubt on that claim. According to page 27 of the analysis, published Tuesday, the legislation, sponsored by Reps. Henry Waxman, a California Democrat, and Edward Markey, a Massachusetts Democrat, would actually result in slightly less new renewable energy generation capacity by the year 2020 than if the U.S. continued on a business-as-usual path with no emissions caps.
That alone makes the bill sound like an absolute dead-end for anyone who favors a sustainable energy portfolio, but it's not that simple (despite the Wall Street Journal's attempt to make it so). Yes, the EPA report indicates that overall renewable capacity may be lower under Waxman-Markey, but the primary reason is that all capacity goes down under Waxman-Markey. The bill's promotion of conservation and improved efficiency means that less electricity will be required overall. As a percentage of the total energy produced, renewables will increase.
However, what the EPA Report does say is that the price Waxman-Markey sets for carbon allowances is not steep enough. As the bill is currently framed, it will do little if anything to push electricity producers away from coal.
On the plus side, Waxman-Markey will place carbon emissions under a regulatory regime for the first time, it will provide funding that encourages research, promotes conservation, fund projects aimed at efficiency, and provide not only direct but indirect support for "green jobs" by building a stable regulatory environment.
On the downside, Waxman-Markey's lax limits, high subsidies, and built in support of coal mean that -- barring breakthroughs that simply cost coal out of the market in other ways -- we will not see the kind of change in our energy picture over the next decade (or two) that many would wish.
With that in mind, it's easy to see how the bill has gotten a mixed reaction from the environmental and energy community. The truth is, Waxman-Markey is better than nothing. But it's not what we hoped for. The complexity and trade offs of the bill are reflected in Darcy Burner's diary on the subject.
Finally, President Obama issued a statement encouraging the passage of the bill.
For more than three decades, we've talked about our dependence on foreign oil. And for more than three decades, we've seen that dependence grow. We've seen our reliance on fossil fuels jeopardize our national security. We've seen it pollute the air we breathe and endanger our planet. And most of all, we've seen that others countries realize a critical truth: The nation that leads in the creation of a clean energy economy will be the nation that leads the 21st century global economy.
Now is the time for the United States of America to realize this, as well. Now is the time for us to lead. The energy bill before the House will finally create a set of incentives that will spark a clean energy transformation of our economy. It will spur the development of low-carbon sources of energy -- everything from wind, solar, and geothermal power to safe nuclear energy and cleaner coal. It will spur new energy savings like the efficient windows and other materials that reduce heating costs in the winter and cooling costs in the summer.
Which sounds great... except that "foreign oil" (or domestic oil for that matter) doesn't compete in the electricity marketplace. It goes in gas tanks. Waxman-Markey does contain instructions for utilities to plan for more infrastructure in support of electric vehicles, and language that allows for encouragement of such vehicles, but it doesn't seem to contain any money toward that end. So whether Waxman-Markey would help reduce America's thirst for oil is as much up in the air as... all the carbon allowed under those permits.
If I was facing this bill on the floor of the Congress, I'd vote yes. But I'd hold my nose while I did it.