March 4, 2010
Senator John Kerry, the Massachusetts Democrat who is the climate action community’s stalwart champion in Washington, argues that how carbon is priced is the single most significant obstacle to passing a climate and energy bill this year in the Senate. With the help of two other lawmakers – Republican Lindsey Graham of South Carolina and Independent Joe Lieberman of Connecticut – Kerry this week floated a proposal to price carbon – the fourth pricing scheme in a year — by assessing a “carbon fee” at the pump to break through Republican and Democratic resistance to the bill.
Critics will immediately recognize the fee as a new fuels tax aimed specifically at encouraging less driving and the purchase of higher mileage vehicles. Good idea. ConocoPhillips, BP America and Exxon Mobil Corp. think so, too. They are said to be supportive, mostly because the fee could be more easily passed on to consumers than a cap-and-trade system that would be applied much further upstream.
Among the principles at the core of climate and energy legislation is to assign an actual economic value to carbon emissions, a way to leverage in dollars and cents the costs of greenhouse gas emissions in order to limit pollution and simultaneously finance the transition to a clean energy economy.
The climate and energy bill approved by the House last June includes a cap-and-trade system, which divided up emission credits among constituents representing more than three-quarters of the U.S. economy. Other ideas that have made their way through the councils of influence on Capitol Hill are:
- A cap-and-dividend system that auctions off pollution permits with the revenue sent back to the public to compensate for higher costs on energy bills and consumer goods.
- Phasing in emission limits for different industrial sectors, beginning with power plants and large stationary sources.
According to an article this week in the New York Times, Rex Tillerson, ExxonMobil’s chief executive officer, told the Economic Club of Washington last October that a new carbon tax could generate surprising political support. “They say a carbon tax is too politically sensitive,” Tillerson said. “I disagree with this assessment. I believe the American people want climate policy to be transparent, honest and effective.”
Also this week the climate community’s work to bolster the Clean Air Act gained important allies. The NAACP, 80 low income and communities of color, the National Tribal Environmental Council, and the U.S. Conference of Mayors sent letters to the Senate opposing Alaska Republican Senator Lisa Murkowski’s resolution to bar the E.P.A. from regulating carbon dioxide. “The Clean Air Act has cost-effectively protected our citizens and the environment for decades,” wrote Tom Cochran, executive director of the national mayors’ conference. “In a 2007 landmark decision the Supreme Court ruled the Clean Air Act covers greenhouse gases and now is the time to put this law to work to fight climate change.”
Senator Murkowski was up to more mischief midweek. She indicated that gaining her vote for a climate and energy bill would come with a big environmental price — opening the Arctic National Wildlife Refuge to oil and gas production.
Talk to you next week, Keith Schneider